Eli Broad and the Trouble With Leading Non-Profits

Broad single-handedly saved Jeff Koons's career...
and profited handsomely from it.

The New Yorker's recent profile on billionaire philanthropist Eli Broad is one of the best articles I've read about the non-profit sector in recent memory.  The moral of the piece is that, when it comes down to it, no non-profit sector CEO or President is really the boss:  the donors are.  This is especially true in a "one-philanthropist town" like Los Angeles.  Eli Broad has just about single-handedly created LA's art scene (he has given over $140 million to LA's art museums), and he demands a lot from the executives beholden to him.    


Broad is picky about prices from famous artists and architects, demands elaborate recognition of his generosity, and forces out executive directors of the art institutions he supports as soon as they even think about disobeying him.


The article draws an interesting distinction between the role of the for-profit executive and the non-profit executive.  A for-profit executive has one simple goal at the end of the day:  profit, and a resulting increasing share price.  A non-profit executive, on the other hand, must run a business efficiency, put on a good public face, please major donors, grow an organization's esteem, and (presumably) affect public good.  Even then, a major donor's whim may leave a non-profit CEO who does everything right out on the street.  This is a scary thought to me:  a non-profit exec needs to be a master of all frames, the political above all.


The article also provoked a second question about non-profit executives:  who is the real shaper of a non-profit's mission:  the donors/Board, or the CEO?  Broad considers himself, as the financial backer making LA's art scene happen, the arbiter of the mission of the museums he supports--moreover, by law, Boards of Directors are the caretakers of a non-profit's mission.  But many CEOs go into non-profit work in the first place because they are moved by a mission--if they are simply carrying out a Board's intent, non-profit executives are no different than for-profit leaders:  bureaucrats beholden by outside interests.  I wonder:  can there be a shared ownership of a non-profit's mission, or do stories like Eli Broad's prove once again that it's all about the money?


--Sean